Nasaa

Most day-trading customers are likely to lose money, and the industry is troubled by questionable loan practices, lax supervision and misleading marketing, state securities regulators said. The North American Securities Administrators Association on Monday called for increased scrutiny of day trading, the fast-paced investment style in which customers make dozens of rapid-fire trades a day in hopes of profiting from small changes in prices. After examining a sample of accounts at a day-trading branch office, the regulatory group said 70 percent of the traders studied there lost money.

If you like keeping lists, there's one you need to clip and post to your refrigerator door. It's the top 10 ways investors get involved in bogus or inappropriate investments. The list is compiled by the North American Securities Administrators Association (NASAA). Some of the schemes are old school. They've been around a long time and yet they continue to trap investors. My favorite -- and I use that word sarcastically -- is the "prime bank scheme." In this con, promoters get people to think that there are high-return, low-risk financial instruments sold by elite overseas banks.

If you like keeping lists, there's one you need to clip and post to your refrigerator door. It's the top 10 ways investors get involved in bogus or inappropriate investments. The list is compiled by the North American Securities Administrators Association (NASAA). Some of the schemes are old school. They've been around a long time and yet they continue to trap investors. My favorite -- and I use that word sarcastically -- is the "prime bank scheme." In this con, promoters get people to think that there are high-return, low-risk financial instruments sold by elite overseas banks.

When the North American Securities Administrators Association announced its top investor traps to watch out for in 2006, there were the usual suspects. On the list again this year were "prime bank schemes." These are sophisticated scams in which con artists promise high-yield, tax-free returns that are said to result from "offshore trades of bank debentures." Investors are told that they are lucky to be privy to such information since only the rich know about such practically risk-free investments.

When the North American Securities Administrators Association announced its top investor traps to watch out for in 2006, there were the usual suspects. On the list again this year were "prime bank schemes." These are sophisticated scams in which con artists promise high-yield, tax-free returns that are said to result from "offshore trades of bank debentures." Investors are told that they are lucky to be privy to such information since only the rich know about such practically risk-free investments.

Every time I look at the list, it bothers me. This is the annual list of the Top 10 scams that the North American Securities Administrators Association (NASAA) has been putting out since 1998. Based on a survey of state regulators and securities enforcement officers, NASAA recently listed the most serious and prevalent scams in 2003, which they estimate cost investors billions of dollars a year. It upsets me that, despite the repeated warnings by regulators, we can't shake some items from the lists -- perennial age-old scams such as Ponzi schemes, fake promissory notes and fraudulent "guaranteed high-yield instruments."

A friend of mine, a woman with some good sense, told me about a couple who had been persuaded to buy dinars, the Iraqi currency, as a great investment. I thought she was joking and started laughing. But she was serious. Investing in foreign currency can be a legitimate way to make money. But it's not for the average investor. And certainly not appropriate for unsophisticated investors. Yet schemes like this will snare a lot of people looking for a winner in the weak market conditions in the United States and abroad.

Here are some of the best places to begin your research on a broker or financial advisor: The Financial Industry Regulatory Authority's BrokerCheck database is available at http://www.finra.org . Look under "Investors. " A new site http://www.helpforinvestors.org launched this summer by a coaltion of industry, regulatory and consumer-oriented groups, aggregates a number of sites for researching the backgrounds of brokers, investment advisors and firms. Want to know if someone is a Certified Financial Planner?

The grilled salmon at the free lunch seminar tasted fine. The mashed potatoes had too much pepper, though. But the worst aftertaste was from the speakers who kept scaring and pressuring the mostly elderly audience with half-truths and distortions. Sadly, that has been my experience at the half-dozen "investment seminars" I've attended the past few months, all geared to seniors and with a free meal thrown in. No wonder. For the first time this year, "investment seminars" made the annual list of "Top 10 Traps" compiled by state securities regulators.

Internet fraud ranks second among the Top 10 investment fraud issues facing state securities cops today. Internet fraud includes market manipulation, insider trading and unlicensed broker and investment adviser activity on the Internet. It ranks directly behind fraud on religious, ethnic and professional groups by their own members, according to the North American Securities Administrators Association. Almost daily, I receive unsolicited e-mail promoting the hottest pharmaceutical stocks or the next Microsoft.

Most day-trading customers are likely to lose money, and the industry is troubled by questionable loan practices, lax supervision and misleading marketing, state securities regulators said. The North American Securities Administrators Association on Monday called for increased scrutiny of day trading, the fast-paced investment style in which customers make dozens of rapid-fire trades a day in hopes of profiting from small changes in prices. After examining a sample of accounts at a day-trading branch office, the regulatory group said 70 percent of the traders studied there lost money.

For six months, I attended every "investment seminar" offering a free lunch that I found advertised in the newspaper or in postcards I got in the mail. I soon realized I would learn little about investing but a lot about high-pressure sales tactics for high-commission products. Although I had no intention of buying anything, I continued attending to gather material for my columns. After a while, the seminars became so unpleasant that I stopped going this year. Now, based on a study by AARP and the North American Securities Administrators Association, I see that little if anything has changed.

State securities regulators have come up with a Top 10 list of investment scams. The list includes Internet fraud, get-rich-quick investment seminars, market manipulation of thinly traded, low-priced stocks called "microcaps," and fraudulent promotions of viatical investments, promissory notes and illegal franchise offerings. Despite all the efforts of federal and state regulators to crack down, these are bullish times for con artists. Inspired and enriched by the stock market's steep climb, many millions of investors are looking for new places to put their money.